The weakest link

The lack of formal banking and cash is one of the toughest constraints in the rural areas of India. The Jan Dhan Yojana might be the best strategy to overcome this. But this ambitious scheme has one critical flaw that could ruin it and result in its failure to deliver on promises: the RuPay debit card. To ensure the success of the yojana, it is essential that the RuPay debit card plan be shelved, because it poses a huge reputation risk — the failure of the card could have damaging consequences for the scheme as a whole.

For families which have been offered bank accounts under the scheme, the advantages of a cash-based economy are just a step away.

Except in the case of the lowest deciles, poor families do have some assets but, in the absence of a ready market for them, they are forced to make distress sales for even routine transactions. Having cash in the bank and, more importantly, a way to easily deposit and withdraw money, will be a force-changer for these families once the banking habit spreads.

The weakness in the system comes from the introduction of the debit card. It introduces the risk of a third party meddling with the savings bank deposits of crores of first-time account users. Earlier government programmes have become non-starters for similar reasons. But before going into this in detail, just imagine the landscape the debit card would create for new bank account holders. Recollect the tense times we went through when we first got cards — debit or credit. Recollect those tentative moments eons ago, when we operated an ATM machine for the first time.

In lakhs of villages across India, instead of offering frugal banking, we are trying to replicate these experiences. The debit card has to be preserved, kept reasonably dust free and intact for its magnetic strip to operate. Though the account won’t be frozen if the card is not used, the accident insurance cover gets cancelled if it is inactive for 45 days.

But this isn’t the chief obstacle. Repeated observations of auditors and independent studies about previous government schemes throw up two concerns. First, there is always one stage or point at which the beneficiary has to approach the district administration or the bank to get into the scheme. This is the point at which money could leak out of the scheme. The second concern is complication. The RBI list of frequently asked questions on the Jan Dhan Yojana, sent to all banks, acknowledges this — the “branch manager will have to advise all the related risks to the illiterate account-holder at the time of issuance of RuPay card”. The RuPay debit

card is in line to be the leakage point from the scheme. It has the weakness of being complex and requiring a third party to administer.

The results could be devastating. Remember, for instance, in the Integrated Rural Development Programme, the loan scheme had two components: a subsidy provided by the government and a loan given by the bank. People may recall the standing instructions issued by bank headquarters to hand over the subsidy to the district or zila parishad representative but not to disburse the loan. The recipient got some money, the officials took a cut, and there was no pressure to repay a loan.

The Jan Dhan overdraft could meet the same fate, of being parcelled out, with the account holder getting the smallest share. To reduce the hassle and risk of keeping the card with themselves, a sizeable percentage of people, typically the weakest, might give it to someone else for safekeeping — a village leader or the bank manager. This is a real risk. The account holder knows if she does not put more money in the bank, she is safe from further loss, so, she will keep her account dry. Yet the safekeepers could purloin the account holder’s share of government subsidy.

The RuPay debit card’s problem is that it is a physical object and, like any government property, lends itself to widespread misuse. A far better option would have been a frugal banking plan based solely on a single-number platform like Aadhaar, with biometric identification, or a telecom number-based identification platform like M-Pesa for the Jan Dhan account holders to remember and use. Every benefit could have been credited to this account.

The debit card adds nothing to the experience of operating a bank account for the new entrant but has all the elements necessary to wreck it.

By the states, for the states

One of the first decisions of the new government has been the decision to scrap the Planning Commission. The Planning Commission, set up in 1950, has increasingly become an anachronistic behemoth, although it did play a crucial role in the initial years when public investment was an overwhelmingly large part of overall investment in the economy. Those were the days when centralised planning, and hence the Planning Commission, had an important role. Obviously, increasing reliance on the market economy in a globalised world and the growth of the domestic private sector have resulted in the commission becoming more or less irrelevant.

Quite apart from the growing irrelevance of the Planning Commission is the fact that there have been serious charges against its actual functioning. Since the government will soon announce a new body that will replace the commission, it is important to keep these in mind, so that the same mistakes are not repeated in future.

Perhaps the most important allegation is that the commission has strayed a long distance away from the role that was initially visualised for it. There has been little attempt to ground the planning process within a consultative framework within which the states and the Central government are equal partners. The Planning Commission has become increasingly autocratic and has typically enforced its diktat over different states. “We know best” may well have become the slogan of the commission. Not surprisingly, state inputs into Five Year Plans have become perfunctory. There are anecdotes that interactions with the commission have become so scarce and meaningless that state allocations are decided even before any interaction with the states. Of course, there are investment projects that are truly national in character, since their reach spans several states. But there are other smaller, state-specific projects whose benefits are more or less contained within the state itself. There can be no justification for allowing officials in Yojana Bhavan to decide unilaterally the contours of such projects.

Another equally serious charge is that the commission has become an agent of the ruling political party or coalition at the Centre. A large fraction of the resources transferred to the states from the Centre are governed by formulas — for instance, those arising from various Finance Commission awards. However, a sizeable component of the transfers is on account of what are called Central plan schemes and Centrally sponsored schemes, and these are almost entirely discretionary in nature. There is overwhelming evidence that the Planning Commission has allowed itself to become an agency of the ruling party or coalition at the Centre, as a disproportionately large fraction of such discretionary grants go to those states that are politically aligned with the ruling party in New Delhi.

There have been reports that the government has been looking at similar bodies in other countries, presumably in order to import best practices from elsewhere. The National Development and Reform Commission (NDRC) in China has often been mentioned in this connection. However, the list of “main functions” of the NDRC is rather frightening. This list seems to include oversight over practically all economic activities in the country. For instance, the NDRC is entrusted with the formulation and implementation of annual and medium-term development plans, to monitor macroeconomic and social development trends and provide forecasts of key economic variables, to summarise and analyse the fiscal and financial situation, and so on. The list is endless — practically nothing seems to be left outside the purview of the NDRC. This format may well be suitable for the Chinese economy as, despite the large size of its private sector, political power in China is after all highly centralised. There is hardly any attempt to have a federal structure — quite unlike the Indian framework.

Perhaps the most important principle that needs to be kept in mind during the restructuring process is to respect the federal structure of our polity. One way in which this can be enforced is by allowing the states themselves to nominate members to the new commission. Of course, each state cannot have its own representative — that would make the commission too big and unwieldy. But the states could be divided into, say, four or five groups, perhaps on the basis of geographical proximity or per capita incomes. And each group can “elect” its own representative.

A system in which members are elected by the states will ensure that the states’ interests are protected, at least partly because the members will know that they owe their appointment to the state grouping to which they belong, and not to the Central government.

Hopefully, this will reduce the misuse of plan funds for narrow political purposes. It will also facilitate the incorporation of state inputs into the planning process.

There is also the issue of specifying the main functions of the restructured commission. The commission should limit itself strictly to its original mandate of allocating resources for Central and state plans. Perhaps a division could also be in charge of the implementation and evaluation of Central plans. Even this may not be required, since different Central ministries surely have a large number of personnel, and each nodal ministry is perfectly capable of carrying out this task. Of course, the new body should certainly not be entrusted with the task of either formulating or evaluating different state plans. Let each state be responsible for its own destiny.

A cursory look at the Planning Commission website reveals that there are about a hundred officers with the rank of deputy secretary and above. There must be a huge support staff as well. Given the reduced role of the planning process in the economy, do we really need such a large number of people? There is no doubt that the commission workforce can be slashed without any effect on its effectivity. This would also be in consonance with the prime minister’s slogan of “minimum government, maximum governance”.

Why is the ozone hole concentrated over Antarctica?

Ozone is a colourless gas. Chemically, it is very active and reacts readily with a number of substances. These reactions cause rubber to crack, hurt plant life, and damage people’s lung tissues. But ozone also absorbs harmful components of sunlight, “ultraviolet B”, or “UV-B, protecting living things below.

Ozone can be destroyed by a number of free radical catalysts, the most important of which are the hydroxyl radical (OH), nitric oxide radical (NO), chlorine atom (Cl) and bromine atom (Br). Human activity has dramatically increased the levels of chlorine and bromine in the atmosphere.

Each year for the past few decades during the Southern Hemisphere spring, chemical reactions involving chlorine and bromine cause ozone in the southern polar region to be destroyed rapidly and severely. This depleted region is known as the “ozone hole”. British scientists discovered this hole in 1985.

The hole in Antarctica occurs in the spring (September to December). It begins with this overall ozone thinning, but it is assisted by the presence of polar stratospheric clouds (PS clouds). During the extreme cold of winter, with no sun for six months, polar winds create a vortex which traps and chills the air; the temperature is below -80 Celsius. The ice in these PS clouds provides surfaces for the chemical reactions that destroy the ozone. This needs light to kick-start the reactions. By the end of spring warmer December temperatures break up the vortex and destroy the PS clouds. Sunlight starts creating ozone again and the hole begins to repair.

Every March to April during the Northern Hemisphere springtime similar, but less pronounced ozone hole forms above the Arctic. The natural circulation of wind, the polar vortex, is much less developed in the Northern Hemisphere above the Arctic.

SoftBank turns largest investor in Indian e-Commerce The Japanese giant recently said that it intends to invest about $10 bn in India over the next few years

Japanese technology major SoftBank has become the largestinvestor in the Indian e-commerce segment. With its latest investment of $90 million in Housing.com, SoftBank’s overall investment in Indian e-commerce stands at about $1 billion.

In October, the company had invested $627 million in Snapdeal.com, while about $210 million was deployed into ANI Technologies’ taxi-booking service Ola Cabs. In November, Bharti SoftBank, a joint venture between Bharti Enterprises and SoftBank Corp, acquired 36.5 per cent stake in ScoopWhoop, an India-focused media start-up, for an undisclosed amount.

It is believed SoftBank owns 30 per cent stake each in Snapdeal.com and Housing.com.

Recently, the Japanese company said it aimed to invest about $10 billion in India through the next few years.

Aashish Bhinde of Avendus Capital says, “Softbank has done extraordinarily well by investing in digital businesses during the early stages of the market’s evolution, as was seen during its investment in Alibaba. Clearly, the Indian digital market is the next frontier for disproportionate value creation, which explains their bullishness on this space.”

SoftBank’s $20-million investment in Chinese e-commerce group Alibaba in 2000 is now worth $86 billion, following the Chinese company floating an initial public offering in the US. Through 10 years, Masayoshi Son, the founder of SoftBank, has increased the value of his investments from $3.3 billion to $99 billion, according to the company’s latest earnings presentation.

The Indian e-commerce market is estimated at $11 billion. It is expected to stand at $20 billion by 2015, a compounded annual growth rate (CAGR) of 37 per cent through 2013-15, according to a recent report by Motilal Oswal Securities. The e-retail segment would be the biggest growth driver (with an expected CAGR of 60 per cent), increasing from $1.7 billion in 2013 to $7 billion in 2016, it added.

Aakash Moondra, chief financial officer of Snapdeal.com, said, “The investment the e-commerce sector is witnessing is an endorsement of the global confidence in India’s growth potential. Globally, investors want to be a part of India’s large untapped growth frontier — e-commerce.”

Another large investor in this segment is Tiger Global, which has funded companies such as online travel portal MakeMyTrip and search engine Just Dial. Tiger Global also led a $1-billion round of investment in Flipkart. It has also invested in Myntra, Quikr and Hike.

Pramod Kumar, managing director, Barclays Capital India, said, “The online retailing segment in India today accounts for a mere 0.5 per cent, compared with 8-13 per cent in developed countries. The sector is expected to grow sevenfold to $30 billion by 2020 and the number of e-shoppers could grow from 20 million to about 90 million. Clearly, India is a massive e-commerce opportunity, which cannot be ignored.”

According to data from VCCedge, this year, 53 deals, worth $3.2 billion, have been recorded in the Indian e-commerce space, against 58 deals worth $587 million last year.

“The increasing adoption of devices such as smartphones, tablets, and laptops, and access to the internet through broadband, 3G, etc, have contributed to the rapid growth of the online consumer base,” said a recent report by Technopak. India’s Internet user base is expected to reach 550 million by 2020, with penetration of about 40 per cent, against the current estimated base of 243 million and penetration of 19 per cent.

Valuable spin-offs from carbon nanotube research

With the sophisticated computerisation of the instrument, the measurements can be done in a fully programmable and controlled manner.

Irrespective of its goal, a scientific research project may sometimes throw up gifts for the researcher that are worth being showcased as well. This is what has happened in the case of Piyush Jagtap, research scholar at Indian Institute of Science’s (IISc) Department of Materials Engineering, who found not one, but two such gifts. One, the invention of a device to measure changes in material property as it moves through an electric field and two, the discovery that carbon nanotube foam can form an effective smart shock absorber in devices such as cell phones.

Guided by his thesis adviser, Dr. Praveen Kumar, Piyush’s research into the properties of carbon nanotubules in an electric field led him to build up, from scratch, an instrument to study the properties of small objects moving in an electric field and also develop the methodology to analyse the measurements.

With the sophisticated computerisation of the instrument, the measurements can be done in a fully programmable and controlled manner. For instance, they can study what happens when the electric field is increased in a pre-programmed way or is switched off while loading and switched on while unloading, or any complicated sequence that is desired. Before they built up this device, there existed no other way of executing this task.

Second spin-off

One of the first things the researchers did was to study the mechanical properties of carbon nanotube foam. They found that the shock-absorbent properties of this material actually get enhanced when it is subjected to an electric field. “If subjected to an electric field of 2 volt per millimetre length of the material, its shock-absorbent properties are enhanced six to seven times,” says Dr. Praveen Kumar. This is good news, for it conveys that carbon nanotube foam would make a good inclusion in mobile phones and such small devices as a shock absorber — smart shock absorber is the word for it. Such shock absorbers become particularly relevant and important as the electronics inside mobile devices such as phones and tablets are becoming increasingly fragile with miniaturisation and increasing current density (electric current per unit area).

The duo is the first to have studied this behaviour, especially because such a device for measuring the effect of a field on a small moving item never existed earlier.

“Developing the instrument took us about four to five months, but we had spent more than a year thinking about the larger problem — the mechanical behaviour of the response of carbon nanotubes in an electric field,” says Dr. Kumar, adding that this work will further pave the way to exploration and collaborations to study different materials.

Taj: the pollutants causing discolouration identified

Particulate carbon and fine dust particles cause browning of the marble

Finally, the specific pollutants in the air that are responsible for the discolouration of the white marble of Taj Mahal have been identified. Particulate carbon and fine dust particles that are deposited on the marble are responsible for its browning.

Carbon is of two types — black carbon and light absorbing organic carbon or brown carbon. The results from a study were published a few days ago in the journal Environmental Science & Technology.

Besides studying air samples collected from the area, the authors used marble samples on the building to collect the pollutants. They also undertook computer modelling to study the colour change brought about by reflectance of the particles.

Both organic carbon and dust particles have the ability to preferentially absorb light in the blue region of the spectrum. The absorption of blue light by these pollutants in turn gives the marble surface a brown hue.

“There is one group of organic carbon which absorbs light in the blue region of the spectrum and this is called brown carbon. Discolouration is because of what is happening to reflectance, and reflectance is in turn influenced by these particles,” said Prof. S.N. Tripathi from the Department of Civil Engineering and Centre for Environmental Science and Engineering, Indian Institute of Technology (IIT), Kanpur. He is one of the authors of the paper.

Role of dust particles

The ability of fine dust particles to produce the brown hue is a well known in North India. According to him, it is the presence of haematite in the dust that is responsible for the brown hue.

“If haematite is not present in the dust then the dust would be only scattering in nature,” he said. Haematite is the ingredient that absorbs the blue wavelength of the spectrum.

Though the absorption of blue light by individual dust particles may be smaller than that by brown carbon, the copious amount of dust of two micron size found in the particulate matter makes the overall absorption much higher than that by brown carbon.

The study revealed that particles larger than two micron in size accounted for nearly 70 per cent of the deposited particle surface area. These relatively coarse particles are by default the dust particles.

Pure dust particles per se do not have the ability to stick to surfaces. “But what we see is a potpourri of particles. The organic carbon is very sticky,” Prof. Tripathy said. Unlike the dust particles, carbon particles are in the 100 nanometre to 1 micron size. Burning of biomass like wood and dung, burning of trash and crop residue are the primary sources of brown and black carbon.

On studying the marble samples, the researchers found that black carbon produces a greyish discolouration, while brown carbon and dust produce yellowish-brown hues.

A combination of these two result in darker shades of yellow-brown. The sample targets were in place only for a brief period of two months.

“We found the colour of surrogate marbles matched well with model results. Modelling showed the combined effect of dust and carbon in discolouration of the marble samples,” he said

Five things to know about Isro's GSLV Mark III mission

The Indian Space Research Organisation (Isro) will launch its first experimental suborbital flight today. 

This will be the test launch for Isro's heaviest and upgraded rocket, the GSLV - Mark III, which is carrying the Crew Module Atmospheric Re-entry Experiment (CARE).

The flight will take off from Isro's space station Sriharikotta, near Chennai. Here are five things you need to know about the GSLV - Mark III mission.

1) After its successful Mars mission, this is Isro's next step to put a man in space

2) The Rs 155 crore mission has twin purposes -- the main purpose is to test the rocket’s atmospheric flight stability with around 4-tonne luggage. The second is to study the re-entry characteristics of the crew module called Crew Module Atmospheric Re-entry Experiment.

3) Other critical technologies are also to be developed for Isro's manned mission. These are being developed parallelly at other centres. But recovery of the capsule from out of atmosphere will be the first to be tested. 

4) GSLV Mark III is the heaviest next generation rocket, conceived and designed to make Isro self reliant in launching heavier communication satellites of INSAT-4 class, which weigh 4,500 to 5,000 kg. Once operational, this rocket will have the capability to ferry four-tonne class of Insat series of communication satellites, which are currently being launched through Arianespace.

5) This is the second mission of the GSLV rocket during the last four years after two such launches failed in 2010.